A manufacturer of construction materials has become the first Chinese company to default on a domestic junk bond, a state-owned Chinese newspaper said on Tuesday, compounding investor concerns over which mainland issuers could be next to miss debt repayment obligations.
Xuzhou Zhongsen Tonghao, based in the prosperous but highly indebted province of Jiangsu, was unable to meet interest payments on Rmb180m (US$29m) in bonds it sold to domestic investors last year, according to the 21st Century Business Herald, a state-owned newspaper. The missed interest payment was estimated at Rmb18m, given the 10 per cent coupon on the bond, and took place last Friday. Continue reading »
Real estate sales in China appear to have slumped during March, compounding investor concerns that more smaller, weaker property developers may be heading for debt defaults.
Data from 42 cities monitored by China Confidential, a research service at the Financial Times, showed that sales volumes during the first 23 days of March were down 34 per cent from the same period a year earlier. Continue reading »
Just when world markets need them least, new signs of underlying economic weakness are emerging from China.
Data from China Confidential, an FT research service on China, show that the real estate market – one of the key 2013 engines of Chinese growth – is starting to sputter. Continue reading »
There is nothing that the west – and we in the western media – love to hate more than when Chinese money threatens to take a chunk of the free media that we see as a cornerstone of our democracies. So when a Chinese recycling millionaire said he was buying the New York Times, we either squealed with outrage or denounced it as a publicity stunt (which it seems that it was). Continue reading »
Like its American counterpart, the Chinese dream remains a rather abstract idea. But that doesn’t stop the leadership in Beijing talking it up – it was a key theme during the recent party plenum.
So where better to see the dream in action than at a show home, designed to entice China’s newly-minted white-collar workers to part with piles of cash? Beyondbrics took a trip to the suburbs of Shenzhen too see how the latest in aspirational living is shaping up. Here are five things we learnt. Continue reading »
Working out what is going on in China’s property market is a tricky exercise.
Take data from the National Bureau of Statistics published on Tuesday. Of 70 cities measured, prices in 69 were on the up, some by 16-plus per cent year on year. That’s bubble territory, surely? But take a look at wages, inventories and developers’ sales and you might think the bubble is deflating or has even popped already. Continue reading »
China’s house prices are surging – sounds familiar, doesn’t it?
But even by the country’s standards, September’s figures are quite staggering. Five cities recorded year-on-year growth of over 16 per cent (Guangzhou, Shenzhen, Shanghai, Xiamen and Beijing). Compared to just six months ago, it looks pretty frothy. Continue reading »
My bubble's bigger than your bubble
Rising house prices and property bubbles are something of a UK obsession. But for all the help to buy worries, house prices rose by just 1.4 per cent year-on-year in the second quarter, according to estate agents Knight Frank.
The figure for London is much higher, of course. But for a housing boom of far greater magnitude, just take a look at Asia. Continue reading »
Li Ka-shing, Asia’s richest man, cancelled his conglomerate’s planned interim results press conference on Thursday for the first time in 10 years and a disposal of his Hong Kong-based supermarket chain ParknShop is under way. What is going on?
Li’s actions have caused a stir in Hong Kong, at least among the media. Reporters have been staking out his house and office building for days; a cameraman got hurt in the crush. But Hong Kongers need to relax. Continue reading »
A Chinese company broke ground this week on the world’s tallest skyscraper only to stumble at the first hurdle when the government halted the project, saying building permission hadn’t been obtained.
The wild ambitions of Broad Group, which wanted to complete the skyscraper in less than a year, and the administrative edict blocking it make for a good story in their own right. But they also serve as a parable about the distorted development of the Chinese economy. Continue reading »
One effect of the recent turmoil in China’s financial markets is that investors are no longer surprised by gloomy news on the economic outlook.
Chinese equities barely flinched after the announcement of the official purchasing managers’ index for June and the final version of HSBC’s PMI for the same period. Even though both pointed stagnating growth in China’s factories, the often-volatile Chinese stock market was almost unmoved, with the Shanghai Composite index closing 0.8 per cent up. Continue reading »
By Eric Lascelles of RBC Global Asset Management
The recent stress in China’s interbank lending market has, quite rightly, attracted renewed attention to the country’s credit excesses. Alas, successfully distinguishing between nourishing credit and gluttonous credit is more easily said than done.
We figure China’s private-sector credit load is now almost twice the size of its economy, putting the country well past its emerging market peers. This provides a hint of coming indigestion. However, some developed nations manage to sustain credit loads double that of China, and the Japan of 1980 – then on the cusp of another decade of rapid growth – was already more levered than China is today. Continue reading »
China’s soaring property prices have been a problem for a long time. But this week, it was not the country’s nascent middle class complaining about rising rents. It was Starbucks.
On Friday afternoon, the US coffee chain closed the coffee shop that had been its first in China. And if its staff is to be trusted, the reason was skyrocketing rent prices. Continue reading »
Here’s an awkward reminder that despite the clear slowdown in the Chinese economy, the property market remains bloated.
China’s house prices rose in May at their fastest rate since January 2011, with average new home prices in 70 big cities up 6 per cent year-on-year, compared to 4.9 per cent in April, according to a Reuters index based on data released by the National Bureau of Statistics.
Tuesday’s numbers only make it harder for the new administration of president Xi Jinping to even consider boosting economic growth. Continue reading »
What is a Nobel Prize worth in the Beijing property market? Not very much if Nobel-winning Chinese author Mo Yan’s experience is anything to go by.
Chinese media reports say Mo (pictured) has bought an apartment on the far outskirts of the Chinese capital that they estimate will have cost him about half his Nobel prize money of $1.2m. Continue reading »